New Delhi: Cash-strapped airline SpiceJet is considering raising fresh capital as it continues to face financial pressure, including delayed payments to suppliers and mounting liabilities. The airline’s board will meet on November 18 to discuss fundraising options, including equity shares, preference shares and debt securities.
In a regulatory filing with the BSE on Friday, SpiceJet said its Board of Directors would consider and approve a proposal to raise funds through one or more permissible financial instruments.
The airline is exploring multiple routes, including a preferential issue, a qualified institutions placement (QIP) or any other method the board considers suitable.
However, SpiceJet has not disclosed the amount it intends to raise or how the proposed funds would be used. Any fundraising plan will also require shareholder and regulatory approvals, wherever applicable.
SpiceJet Faces Rs 63 Crore In Delayed Supplier Payments
The proposed fundraising comes as the airline faces concerns over its ability to meet payment obligations.
Between April and September, SpiceJet reportedly missed the statutory 45-day payment deadline for more than 85 per cent of invoices raised by small suppliers. An amount of Rs 63.03 crore remained unpaid beyond the prescribed period.
Under the payment rules applicable to micro and small enterprises, buyers must clear dues within the agreed period, which cannot exceed 45 days where a written agreement exists.
Airline’s Active Fleet Down To 12 Aircraft
SpiceJet is also dealing with operational challenges as its active fleet has reportedly fallen to 12 aircraft. The limited fleet has contributed to operational disruptions and daily flight cancellations.
The airline’s proposed capital-raising exercise is expected to be considered against this financial and operational backdrop. However, the board has yet to approve the proposal, and the company has not announced a fundraising target.
SpiceJet also informed the stock exchanges that its trading window would remain closed until further notice, in line with the Securities and Exchange Board of India’s insider trading regulations.
